Shri Ashwinbhai R. Patel, Anand V. The Income Tax Officer, ward-3(3), Petlad

ITA 787/AHD/2014

• Counselvise Citation: 78720514 RSA 2014
• Duration Of Justice: 1 year(s) 5 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 01-07-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 18-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NARENDRA SINGHSR D R
• Keywords: Sale consideration of property below Jantri Value; Business income
• Section: 50C

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD .. , ( .) , BEFORE SHRI G.D. AGARWAL,VICE PRESIDENT (AZ) AND SHRI KUL BHARAT, JUDICIAL MEMBER ./ I.T.A. NO.787/AHD/2014 ( / ASSESSMENT YEAR : 2010-11) SHRI ASHWINBHAI R.PATEL SARVDAS SHROFF BAZAR AT: DHARMAJ, TA: PETLAD DIST: ANAND 388 340 / VS. THE INCOME TAX OFFICER WARD-3(3) PETLAD % & ./ ./ PAN/GIR NO. : ACZPP 4351 N ( %( / APPELLANT ) .. ( )*%( / RESPONDENT ) %( + / APPELLANT BY : SMT. ARTI N.SHAH, AR )*%( , + / RESPONDENT BY : SHRI NARENDRA SINGH, SR.DR -. , /& / DATE OF HEARING 20/08/2015 0123 , /& / DATE OF PRONOUNCEMENT 26/08/2015 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE LD.COMMISSIONER OF INCOME TAX(APPEALS)-I, BARODA [CIT(A) IN SHORT] DATED 06/12/2013 PERTAINING TO ASSESSMENT YEAR (AY) 2010-11. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-I , BARODA HAS ERRED IN LAW AND ON FACTS OF THE CASE IN CONFIRMING THE ADDITION OF ITA NO.787/AHD/ 2014 SHRI ASHWINBHAI R.PATEL VS. ITO ASST.YEAR 2010-11 - 2 - RS.38,44,204/- U/S.50C OF THE I.T.ACT, 1961 THOUGH THE SALE OF LAND WAS ADVENTURE IN NATURE OF TRADE AND INCOME THEREFR OM WAS CHARGEABLE TO TAX AS BUSINESS INCOME. 2. YOUR APPELLANT PRAYS TO RESERVE THE RIGHT TO ADD, A LTER, AMEND AND/OR WITHDRAW ANY OF THE ABOVE GROUNDS OF APPEAL. 2. DURING THE COURSE OF HEARING, THE ASSESSEE HAS A LSO FILED AN ADDITIONAL GROUND THAT READ AS UNDER:- 1. LEARNED ASSESSING OFFICER HAS ERRED IN NOT REF ERRING THE VALUATION OF PROPERTY TO VALUATION OFFICER AS PER P ROVISIONS OF SECTION 50C(2) OF THE I.T.ACT, 1961. 2. LEARNED CIT(A) HAS ERRED IN NOT CONSIDERING DED UCTION OF SHARE OF CONFIRMING PARTY VIZ. M/S.NATURE DEVELOPERS AND SHRI BRIJESH PRAVINBHAI PATEL AS PARTNER IN THE LAND. 3. LEARNED CIT(A) HAS ERRED IN NOT CONSIDERING THE CLAIM OF APPELLANT TO THE EFFECT THAT SALE CONSIDERATION OF LAND WAS PAID IN FULL AND POSSESSION OF LAND WAS GIVEN AGAINST BANAK HAT EXECUTED ON 21-05-2009 AND THEREFORE BANAKHAT HOLDER WAS OWN ER OF THE LAND AND TO THE APPELLANT. 2.1. BRIEFLY STATED FACTS ARE THAT THE CASE OF THE ASSESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT U/S.143( 3) OF THE INCOME TAX ACT,1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS FRAMED VIDE ORDER DATED 28/12/2012; THEREBY THE ASSESSING OFFICER (AO IN SHORT) MADE ADDITION(S) OF RS.38,44,204/- ON ACCOUNT OF SHORT T ERM CAPITLA GAIN (STCG) AND OF RS.3,16,163/- ON ACCOUNT OF INCOME EA RNED FROM OTHER SOURCES. AGAINST THE ASSESSMENT ORDER, ASSESSEE PR EFERRED AN APPEAL BEFORE THE LD.CIT(A), WHO AFTER CONSIDERING THE SUB MISSIONS OF THE ITA NO.787/AHD/ 2014 SHRI ASHWINBHAI R.PATEL VS. ITO ASST.YEAR 2010-11 - 3 - ASSESSEE DISMISSED THE APPEAL. AGGRIEVED BY THE OR DER OF THE LD.CIT(A), ASSESSEE IS FURTHER IN APPEAL BEFORE US. 3. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT T HE AO WAS NOT JUSTIFIED IN TREATING THE BUSINESS INCOME AS INCOME FROM CAPITAL GAINS. SHE SUBMITTED THAT THE AO ALSO EARNED IN MAKING ADD ITION WITHOUT REFERRING TO THE VALUATION OFFICER. SHE FURTHER SU BMITTED THAT OUT OF FIVE PROPERTIES, IN ONE OF THE PROPERTIES THE ASSESSEE W AS ONLY A CONFIRMING PARTY. THEREFORE, THE AO WAS NOT JUSTIFIED IN MAKI NG THE ADDITION TR4EAGING THE SAME AS CAPITAL GAIN. DURING THE COU RSE OF HEARING, THE ASSESSEE HAS ALSO FILED ADDITIONAL GROUNDS TO THIS EFFECT. 3.1. ON THE CONTRARY, THE LD.SR.DR SUPPORTED THE OR DERS OF THE AUTHORITIES BELOW. HE SUBMITTED THAT THE TRANSACTI ONS WERE NOT DISCLOSED BY THE ASSESSEE. THE REVENUE CAME TO KNOW ONLY THR OUGH THE INFORMATION SUPPLIED BY THE REGISTERING AUTHORITY. HE SUBMITTED THAT THE ASSESSEE OUGHT TO HAVE DISCLOSED ALL MATERIAL FACTS INTO HIS RETURN OF INCOME. THE ASSESSEE HAS BEEN CHANGING HIS STAND W HICH IS EVIDENT FROM THE ADDITIONAL GROUNDS FILED. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. IN THE ADDITIONAL GROUNDS, THE CONTENTION OF THE AS SESSEE IS THAT THE AO ITA NO.787/AHD/ 2014 SHRI ASHWINBHAI R.PATEL VS. ITO ASST.YEAR 2010-11 - 4 - ERRED IN NOT REFERRING THE VALUATION OF THE PROPERT Y OF THE VALUATION OFFICER AS PER PROVISIONS OF SECTION 50C(2) OF THE ACT. IT IS SUBMITTED THAT IF THE REVENUE AUTHORITY TREATING THE RECEIPT AS CAPITAL GAIN, BUT NOT AS TRADING RECEIPT IN THAT EVENT THE AO OUGHT TO HA VE REFERRED THE MATTER TO DVO IN VIEW OF THE MANDATORY PROVISION OF SECTIO N 50-C(2). THIS CONTENTION IS RAISED FIRST TIME AND WAS NOT RAISED BEFORE THE AUTHORITIES BELOW. LD.COUNSEL FOR THE ASSESSEE SUBMITTED THIS I S LEGAL GROUND AND IT IS SETTLED POSITION OF LAW THAT THE LITIGANT IS NOT PR ECLUDED FROM RAISING THE LEGAL GROUND AS IT GOES TO VERY ROOT OF LEGAL RIGHT OF THE ASSESSEE. 5. AFTER CONSIDERING THE TOTALITY OF THE FACTS OF T HE CASE AND THE SUBMISSIONS MADE AT BAR, THERE IS NO DISPUTE WITH R EGARD TO THE FACT THAT THE ISSUE REFERRING TO THE VALUATION OFFICER WAS NO T RAISED BEFORE ANY OF THE AUTHORITY. DURING THE COURSE OF HEARING, BOTH THE REPRESENTATIVES OF THE PARTIES AGREED THAT THE MATTER MAY BE RESTORED TO THE FILE OF AO TO DECIDE THE ISSUE OF REFERRING TO THE VALUATION OFFI CER. THEREFORE, WE HEREBY SET ASIDE THE ORDERS OF THE AUTHORITIES BELO W AND RESTORE THE MATTER TO THE FILE OF AO FOR DE NOVO ASSESSMENT, AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE WITH REGARD TO REFERRIN G THE VALUATION OF THE PROPERTY OF THE DVO IN TERMS OF THE PROVISIONS OF S ECTION 50C OF THE ACT. ACCORDINGLY, ASSESSEES ADDITIONAL GROUNDS OF APPEA L ARE ALLOWED FOR STATISTICAL PURPOSES. ITA NO.787/AHD/ 2014 SHRI ASHWINBHAI R.PATEL VS. ITO ASST.YEAR 2010-11 - 5 - 6. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON WEDNESDAY, THE 26 TH DAY OF AUGUST, 2015 AT AHMEDABAD. SD/- SD/- ( .. ) ( ) ( . ) ( G.D. AGARWAL ) ( KUL BHARAT ) VICE PRESIDENT (AZ) JUDICIAL MEMBER AHMEDABAD; DATED 26/ 08 /2015 6/..-, .-../ T.C. NAIR, SR. PS !'#$%&%# / COPY OF THE ORDER FORWARDED TO : 1. %( / THE APPELLANT 2. )*%( / THE RESPONDENT. 3. 789 : / CONCERNED CIT 4. : ( ) / THE CIT(A)-I, BARODA 5. ;< )-89 , / 893 , 7 / DR, ITAT, AHMEDABAD 6. <= >. / GUARD FILE. / BY ORDER, *; ) //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION ..20/8/15 (DICTATION-PAD 6+ PAG ES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER .. 20/08/15 3. OTHER MEMBER... 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S.26.8.15 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 26.8.15 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER